Monday, May 30, 2011

Bond Auctions Set to Measure Contagion Fears

Wall Street JournalMay 30, 2011

A team of European and International Monetary Fund officials is scheduled to conclude a closely watched examination of Greek government finances this week as bellwether bond auctions are expected to provide a sign of whether anxiety over Greece's debts is infecting investor appetite for sovereign bonds elsewhere in the euro zone.

Italy will seek to raise as much as €8.5 billion ($12.1 billion) from bond investors Monday, while Spain is seeking an estimated €3.5 billion as officials from the so-called troika of the IMF, the European Central Bank and the European Commission finalize their deliberations.

he troika is examining how to fill a shortfall in Greece's finances next year after it became clear that the country wouldn't be able to return to bond markets next year, as originally planned under the €110 billion Greek bailout of a year ago, and after it failed to hit budget cutting targets.

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This blog is dedicated to the understanding of the current Greek (but also European) economic, political and institutional crisis. It was created by Prof. Aristides Hatzis of the University of Athens, after many requests by his students who seek a source of reliable analysis on the Greek current affairs. Its aim is to post commentary and reports published mainly in the major U.S. and European media and to encourage a rigorous discussion.